THE NIGERIAN CAPITAL MARKET AND IT’S CONTRIBUTION TO THE ECONOMY

Project Abstract

The Nigerian capital market plays a crucial role in the country's economy by providing a platform for businesses to raise long-term funds for expansion and development. This research aims to investigate the various ways in which the Nigerian capital market contributes to the overall economic growth and development of the country. The study will analyze the role of the capital market in mobilizing savings and channeling them into productive investments. By facilitating the trading of financial securities such as stocks and bonds, the capital market enables companies to raise capital from a diverse group of investors, thereby reducing their dependence on traditional bank loans. This, in turn, promotes a more efficient allocation of resources and encourages entrepreneurship and innovation. Furthermore, the research will explore how the capital market enhances corporate governance and transparency in the Nigerian business environment. Publicly traded companies are subject to stringent disclosure and reporting requirements, which help to build investor confidence and protect shareholders' interests. The market also serves as a mechanism for monitoring corporate performance and holding companies accountable for their actions, thus promoting good corporate governance practices. In addition, the study will examine the role of the capital market in fostering economic development through the creation of wealth and job opportunities. As companies raise capital and expand their operations, they create employment opportunities and contribute to overall economic growth. The capital market also provides individual investors with opportunities to invest in profitable ventures, thereby allowing them to grow their wealth and improve their standard of living. Moreover, the research will investigate the impact of the capital market on government financing and infrastructure development. By issuing bonds and other debt instruments, the government can raise funds for critical infrastructure projects such as roads, bridges, and power plants. This not only helps to stimulate economic activity and create employment but also improves the country's overall infrastructure, making it more attractive to both domestic and foreign investors. Overall, this study will provide valuable insights into the importance of the Nigerian capital market as a driver of economic growth and development. By analyzing its various contributions to the economy, policymakers and stakeholders can better understand how to leverage the capital market to achieve sustainable and inclusive economic development in Nigeria.

Project Overview

<p> </p><h3><strong>INTRODUCTION</strong></h3><h3><strong>1.1 &nbsp;BACKGROUND OF THE STUDY</strong></h3><p>To understand the Nigeria Economy there are two crucial document the Nigerian Development plant and Annual budget, which in general the plan given a ten years perspective of the economy five before and fire years. Hence budget give two years perspective. One year before and up date the plan on an Annual basis. Darning from the perspective, the think, objective and strategic of the economy are established. The plan and budgets also specify the policy thrust for Achiving the set objective broadly these are fiscal and monetary policies. While fiscal policy involves measures or combination of measures in government Revenues and expenditure monetary policy involves measures or combinational of measures to influence or regulate the volume price of direction of money and credit. </p><p>While the two instruments are analytically different they have a common objective of influencing Aggregate economic activity to achieve the overall economic objective of the nation. Capital market are markets in which under and investor provides long-term fund in exchange for financial assets offered by borrowers or holders- it is also where long- term financial assets are bought and sold and has and original maturity of more than one year. Capital market provide liquidly for financial assets, thus making investors more willing to hold them.</p><p>Improvements in information, functioning and efficiency in capital market approve liquidity and hence facitate the flow of fund into investments, capital market activities, started prior to 1960. Infact two federal government stock 3 1/4 percent first development loan stock issued on 1940 and 1959 respectively the Lagos Exchange did not commence operation until 1961 from the exchange had only 14 companies up to 1971, but this situate has reversed in the period between 1971 and 1974 when the number reached 34 in order words, government fiat accounted for the relatively rapid growth of exchange.</p><h3><strong>1.2 &nbsp; STATEMENT OF THE PROBLEM</strong></h3><p>With the increase in the security and exchange commission valuation activities one is left to say that the Nigeria capital market is enhancing it’s performance there by contributing to the growth of the economy. ( A total of 253 securities, involving 1.734 billion shares valued at 2.033 billion were assessed by securities and exchange commission in 1989 compared with 129 securities with 593.4 million in the proceeding years).</p><h4><strong>1.3 &nbsp; OBJECTIVE OF THE STUDY</strong></h4><p>The main aim and objectives of this study involves &nbsp; &nbsp; &nbsp; around the following:</p><p>1.To identify the contributions of the Nigerian capital market in our Economy.</p><p>2.To explain what Nigerian capital market is all about.</p><p>3.To know the performance of the Nigerian capital market toward growth of the economy.</p><p>4.To identify the problems of the N.C.N</p><p>5.To make suggestions for improved performance</p><h5><strong>1.4 &nbsp;SIGNIFICANCE OF THE STUDY</strong></h5><p>The market for long-term government securities is guide important because government securities provide most of the ultimate liquidity that is important whenever the possibility of substantial default or other obligation occurs. Other government security instrument are income tax management Act of 1961 and national provident fund Act of the former provides tax incentives of pensions and provident fund which the later restrict investment and debenture listed on exchange</p> <br><p></p>